I Want a Pony for Christmas!

2012-04-02Entitlements are a dangerous thing for an economy and in today's article, Jeff Thomas analyzes where such things come from and where they can lead.

It might be obvious to those of us with any level of common sense, but a 2-bedroom, 1-bathroom apartment in the middle of a busy metropolis is not the best environment to raise a pony (or horse of any type for that matter). And yet, year after year right around December the 25th, millions of little boys and girls beg their mommies and daddies (and Santa) to deliver the desired equine right alongside the customary underwear, socks and ugly sweater from grandma.

And why does little Tammy want it so much? Just because she does.

Of course, if the city-dwelling parent has any brains at all, he or she won't deliver on this wish, not least of all because it's completely impractical, expensive and none too nice for the horse either. The child doesn't know any better of course, and since it's not her money nor ultimately her responsibility, she can be forgiven.

Unfortunately, however, as most of these children grow, this "pony syndrome" (i.e. getting something for nothing) never really goes away but rather just takes on a different form... what the grownups call entitlements. The impracticality and expense remains however, and can cause some serious problems for society as a whole.

I WANT A PONY FOR CHRISTMAS

When I was a boy, cowboys were all the rage, and I, like most other kids my age, wanted a pony for Christmas. Every year from about age four to ten, I asked for a pony, but I never got one.

At the time, I thought that my parents were being unreasonable. I wasn't interested in their arguments that we didn't live in the country and that a pony would be difficult to take care of. I simply wanted the pony, and that was all the logic I needed.

I suppose that, after age ten, I gave in to the idea that I wouldn't get a pony, and, in my teens I slowly accepted that my parents had been right. It had not been a reasonable request. I assume that the other children who wanted ponies had a similar experience.

The Relationship Between Earning and Receiving

My fondness for equines never went away, and, later in life, I bought some acreage in the country and built a horse ranch. Having the ranch is impractical, costly and illogical, but I happen to like horses, and I've earned the ability to indulge my interest.

The description above, to my mind, should be the norm for people from all walks of life. Essentially, when we are young and impractical, we decide we want something, but we generally don't intend to go out and earn it. What we do is ask others to provide it for us, then whine if it is not forthcoming. As we mature, we (hopefully) learn to understand the relationship between earning and receiving. For the remainder of our lives, we abandon many items from our wish lists as not being worth the effort to earn them. Others we pursue, and, if we work effectively enough, we acquire them one day.

This norm is perennial, having stood the test over millennia. However, periodically in history, there have been times, from the latter part of the Roman Empire to the present day First World, when abnormalities creep in and become dominant trends, in conflict with this norm. During these periods, a major portion of the population develops a decided tendency to demand unrealistic "presents." Much as young children do, they toss out all logic, and focus only on the fact that they want what they want and expect it somehow to be provided by others.

These trends tend to feed on themselves, resulting in an ever-greater number of people who want things that they have not earned, and want increasingly more of them. Of course, in the twenty-first century, we call these things "entitlements." It's a marvellous choice for a word. It suggests that, if we do not receive these presents, we are being cheated.

But, historically, the idea of entitlements is not a constant. In fact, in most stages of development in most countries, entitlement trends tend to occur in times of great abundance.

Just as the logic of entitlements is childlike and irrational, periods of great entitlement (over 50% of the population being on the receiving end) are invariably unsustainable, and eventually result in either major cutbacks or an economic collapse of some sort.

In actual fact, it is really quite easy to avoid such destructive trends. All that is needed is for whoever is in charge to be the adult in the room, to explain that, as much as we want a pony for Christmas (or welfare, social security, medicare, etc.), someone has to pay for it, and that someone declines to provide the unreasonable request.

So, since it is so easy to avoid making this mistake, why do entitlement trends tend to pop up from time to time during periods of great abundance?

Politicians to the Rescue

I can't say with certainty that the cry to create such trends always begins with politicians, but I think it is safe to say that politicians are the predominant source in most, if not all, occurrences. And, as far as I am aware, the suggestion for a new or increased entitlement always takes the same form. The politician suggests that those people who want to get a pony for Christmas deserve to get one, and, since they deserve to get one, the politician plans to champion the cause. (I believe it can also safely be said that the politician hopes to have his "gift" remembered at the next election.)

The fly in the ointment is that that the "gift" is not a gift at all, since the politician is giving away something that does not belong to him. He is not reaching into his pocket to pay for ponies for all who want them. If that were the case, he would quickly become the adult in the room and advise that the request is an unreasonable one.

In every such case, the politician takes money from the "adults" (those who have been doing the earning) and uses it to buy "ponies" for the "children" (those who would like to receive something that they did not earn.)

So, now, everyone has a pony, the politician has won his election, and we're done, correct? Sadly, no. In the not-too-distant future, he will come up for election again, and so will a host of others. Bigger promises will have to be offered if elections are to be successful.

Now everyone needs to have two ponies.

Whenever entitlements are first proposed, the number of voters that support the concept is small, but, understandably, as entitlements become an institution, more and more people will quite naturally feel that they also should be included. In fact, it would be understandable if 100% of the population eventually got on the bandwagon, but, historically, there has always been a percentage who realise that someone has to be the adult in the room, and that such a trend is, ultimately, unsustainable.

The Day of Reckoning

The outcome of such trends is rather nasty, since those who have been on the receiving end of entitlements for long periods (sometimes generations) are, in effect, lifelong "children," never having learned the relationship of earning and receiving. When the day comes that the entitlements can no longer be sustained, those who are cut off behave... like children. They have tantrums, albeit of an adult sort. Adult tantrums tend to take place on the streets and involve throwing rocks and setting fire to cars. (It doesn't seem to matter whether the owners of the cars were responsible for the cutbacks. Whatever car is handy gets the torch.)

In today's world, the politicians of most First World countries have done a bang-up job of pony distribution, and we are now observing the first major cutbacks. Many of us who watch the evening news and view the demonstrators in Greece feel that it is only right that the Greek people be cut back to an entitlement level that is... reasonable. What level is reasonable? Why, the level that we ourselves receive - no more, no less.

When we view the news reports, what we should do is recognise that Greece is only the first of many that will need to cut back. When we see videos of the Greek riots, we should imagine a sign across the television screen that says, "Coming to a City Near You."

Those who live in or near a large metropolitan area would be well-advised to have an escape plan, should their city be one of the many that will be affected in the coming years. Further, they would be well-advised to consider to what degree they are dependent upon entitlements and, therefore, to what degree they could afford to lose them.

To be sure, the future will be different for each country. Some will take a bigger hit than others. Trouble is, none of us knows for certain to what degree our own jurisdiction will suffer cutbacks. If at all possible, an effort to create a life that is not dependent on them would certainly be timely.